Contracting on the rise again

Wednesday 14 August 2013

More workers are turning towards the flexibility and higher rates of contracting, it seems, as the number of self-employed workers in the UK rose last quarter.

According to the latest data from the Office for National Statistics (ONS), a total of 6,000 new workers chose to strike out on their own, meaning there are around 4.18 million people in self-employment around the UK.

The majority of people working for themselves were male, with nearly three million men in self-employment compared to 1.26 million women. Perhaps this is related to the fact that men outnumber women in key contractor disciplines such as management, professional and technical occupations.

And it seems as though the ability to choose their own hours is part of the appeal, with a small rise of 1.4 per cent in the number of self-employed people choosing to work part-time. This way of working is often seen as beneficial for women, who are statistically more likely to work flexibly around their families. Indeed, women still outnumber men as part-time contractors, with 653,000 women working limited hours for themselves as opposed to 518,000 men. However, it seems that men are increasingly following suit, with a dramatic quarterly rise of 19 per cent.

Roughly half of all workers employed on a temporary basis did so part-time, but those on fixed-term contracts were still more likely to do so full-time. Only 266,000 out of 700,000 contractors worked part-time. However, out of a total of 1.5 million people in temporary work, 321,000 - around a fifth - said they did not want a permanent job, pointing to a strong element of the workforce who value the freedom that contract work provides.

ONS updates the Labour Market Statistics once a month, but figures for self-employment and temporary workers are only collected on a quarterly basis. The data published today (August 14th) covers the period between April and June this year and demonstrates a marked improvement from the previous quarter, when 42,000 fewer people were working for themselves.

It seems that the improvement echoes a broader upturn in the UK labour market. ONS found that in the April-June period, 301,000 more people were in employment compared to the previous year, while 49,000 fewer people were unemployed. Overall, the employment rate for workers between 16 and 64 years old stood at 71.5 per cent.

It appears the UK’s wages are gradually edging upwards with a rise of 1.1 per cent year-on-year, but this lags behind all major measures of inflation. Just yesterday ONS said that the Consumer Prices Index grew by 2.8 per cent in the year up to July. Even including bonuses, average earnings stand at just 2.1 per cent, meaning that in real terms it looks like the UK has taken a pay cut.

At a time when demand for contractors is high in all the key disciplines, though, freelance workers are still in a good position to command impressive rates.

By Victoria McDonnell

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